Utstarcom Holdings Corp · NASDAQ:UTSI
Utstarcom — Investor Presentation (May 2014)
39 slides from Utstarcom's investor presentation, May 2014
Slide 1: Investor Presentation
Investor Presentation NASDAQ: UTSI May 2014
Slide 2: Disclosure & Forward Looking Statements
Disclosure & Forward Looking Statements This investor presentation contains forward-looking statements, including statements regarding the Company's expectation regarding its strategic initiatives and business outlook. Forward-looking statements are based on current expectations, estimates, forecast
Slide 3: Key Investment Highlights
Key Investment Highlights • Great Growth Potential of Wireless Broadband and Software 1 Defined Networking (SDN) Multiple Blue Chip Customers • 2 Solid Product Portfolio • 3 Strong R&D and In-House Manufacturing Capability 4 Global Sales & Marketing Strategy • 5 Competitive Advantage over Peers Prov
Slide 4: Great Growth Potential of Wireless Broadband and Software Defined Networking (SDN)
Great Growth Potential of Wireless Broadband and 1 Software Defined Networking (SDN)
Slide 5: Great Growth Potential of Wireless Internet
Great Growth Potential of Wireless Internet # of Global Smartphone Users and Penetration # of Downloads of Mobile Apps From All Stores (Million) (Billion) 2800.00 350 310 300 2300.00 2280 2030 ’11-’16E CAGR: 65.5% ’11-’16E CAGR: 18.0% 250 1800.00 1750 205 200 1430 1300.00 150 132 1130 998 100 81 800
Slide 6: Great Growth Potential of Broadband Market
Great Growth Potential of Broadband Market # of Global Broadband Subscribers Global IP Traffic (Million) (Zettabyte / Month) 900.00 120.00 850.00 830 110 800 800.00 100.00 94 ’11-’16E CAGR: 7.8% ’11-’16E CAGR: 29.0% 750.00 745 77 80.00 695 700.00 59 60.00 650.00 630 44 40.00 600.00 31 570 20.00 550.
Slide 7: Solid Product Portfolio
of ee 4 Z Ze » © . °e oe %e yr, vs a (2) @% Solid Product Portfolio ; a aif ® A. Gee , -. FO _Z
Slide 8: Simple Network, Simple Operation
“Simple Network, Simple Operation” Simple Network • Infrastructure Efficiency • Provide Multiple Services on a Common Platform Simple Operation • Centralized Network management • SDN-ized Metro Network • Integration of Services and Transport • Efficiency solutions Network operators can achieve reduc
Slide 9: UTStarcom Products Portfolio
UTStarcom Products Portfolio Software Defined Network (SDN) & Network Management System (NMS) • In-house developed SOO Network: • Strong network and device Software Defined Open Optical Network management with e2e provisioning • SOO Station: SDN Sub/Central Controller capability • SOO Store/Design/B
Slide 10: Software Defined Open Optical Network (SOO)
Software Defined Open Optical Network (SOO) SOO Network SDN technology revolutionizes the way that service providers operate and meet the rapidly evolving requirements of their customers. UTStarcom’s SOO (Software-defined Open Optical network) platform answers the requirements of telecom operators
Slide 11: SOO Architecture and Applications
SOO Architecture and Applications Application Layer Apps SOO Store SOO Design SOO Builder SOO Care 3rd party apps Telcos’ Backside DB API API API API API Customer Info from CRM Controller Layer API GIS Info from Google Map Access Resource Central Controller API NetRing2500 (fiber, CPE, port… ) API I
Slide 12: Packet Optical Transport Products based on MPLS-TP and Carrier Ethernet (CE)
Packet Optical Transport Products based on MPLS-TP and Carrier Ethernet (CE) Packet Optical Transport Products Access/Edge Device Edge/Aggregation Device Aggregation/Core Device TN 703E 44Gb/s SW TN 725/E TN 765 108/176Gb/s SW 1Tb/s / 1.28Tb/s FE/GE/XGE 2.5/10G POS SW E1/STM-1 FE/GE/XG
Slide 13: Case Study: Packet Optical Transport Deployment
Case Study: Packet Optical Transport Deployment •Customer Requirements: To integrate Metro Aggregation from three separated networks (MSTP/IP/ ATM) into one unified network for all services. •Solution: Network integrated by UTSI strong packet optical transport devices and powerful NMS; Over 8000 MPL
Slide 14: Case Study: 50% - 80% OPEX Savings after Deployment
Case Study: 50% - 80% OPEX Savings after Deployment 100 90 Equipments Maintenance from Main Vendors 80 70 People Who Need Manage 3 60 or More Networks like ATM, SDH, IP Routers/Switches 50 Spares and Other 40 Accessories 30 Powers, Spaces and Other 20 Entitles 10 0 Before 50% OPEX 80% OPEX Deploymen
Slide 15: Strong R&D and In-House Manufacturing Capability
3 Strong R&D and In-House Manufacturing Capability
Slide 16: Strong R&D and Technical Support
Strong R&D and Technical Support Capable R&D and Team Global presence with forceful, flexible, and agile development and support capability R&D Center in Hangzhou, China established in 1991 45% employees have graduate degree or above Full range of product knowledge from access to core 60
Slide 17: Outstanding In-House Manufacturing Capability
Outstanding In-House Manufacturing Capability Over 20 years focus on producing telecom equipments •From PCB Assembly To MEC Assembly To System Integration •From NPI (New Products Introduction) To MP (Mass Production) •SMT, THT (PTH), MEC Assembly, Micro BGA, CSP,0201 •BGA Rework and Re-Balling B
Slide 18: Global Sales & Marketing Strategy
4 Global Sales & Marketing Strategy
Slide 19: Multinational Marketing & Sales Network
Multinational Marketing & Sales Network 19
Slide 20: Three Pronged Broadband Marketing & Sales Strategy
Three Pronged Broadband Marketing & Sales Strategy Deepen penetration in existing commercial markets Develop and source additional synergistic products for existing customers Develop new customers in Japan, Taiwan, and other markets Grow with our existing customers globally Leverage existing s
Slide 21: Competitive Advantage over Peers
5 Competitive Advantage over Peers
Slide 22: Competitive Advantage over Peers
Competitive Advantage over Peers Competitive Landscape Advantages of UTStarcom Low A long-time international player with strong Asian presence while Price / Margin Advantage (Horizontal) without national security concerns of major Chinese players Weak Strong Price/Margin advantage over tradition
Slide 23: Experienced Management Team
6 Experienced Management Team
Slide 24: Experienced Executive Management Team
Experienced Executive Management Team William Wong, CEO & Director Over 30 years of experience in management, marketing and operations M.S. and MBA, University of California, Berkeley B.S., Electrical Engineering, Northwestern University Previously held positions in AT&T, Lucent, Bell Labs R
Slide 25: Valuable Strategic Investment
7 Valuable Strategic Investment
Slide 26: aioTV, Inc.
aioTV, Inc. Business Overview aioTV is an OTT middleware video platform for licensed and unlicensed content targeted at service providers and content owners worldwide to allow them to easily aggregate multiple sources of live, on-demand and freely available video content into a single, unified TV
Slide 27: iTV Media, Inc.
iTV Media, Inc. Overview Diversified Content Founded in 2010, iTV Media is dedicated to pioneering the transition of traditional telecom networks to advanced triple-play entertainment services providers by delivering all-digital, high definition, intelligent, and interactive television services.
Slide 28: Wireless City Planning, Inc.
Wireless City Planning, Inc. Overview Founded in June 2010, Wireless City Planning (WCP) engages in planning and provision of wireless broadband services, and became Worldwide No.1 and pioneer Mobile Virtual Network Operator (MVNO) in connectivity in the smartphone era. Use innovative TD-LTE com
Slide 29: Improving Financial Performance
8 Improving Financial Performance
Slide 30: 2014 Q1 Key Financial Highlights
2014 Q1 Key Financial Highlights Revenue decreased slightly year over year and we expect revenue from new products to ramp up beginning in the later part of 2014. Gross profit and gross margin decreased year over year due to Japanese Yen depreciation against the US dollar by 14% and change in pr
Slide 31: Improving Operating Cash Flow
Improving Operating Cash Flow US$ in millions US$ in millions -1.9 -3.1 -4.7 -11.4 -41.7 24.7% -67.4 -92.9 2009 2010 2011 2012 2013 Q1 2013 Q1 2014 31
Slide 32: Net Revenue
Net Revenue US$ in millions US$ in millions 179.1 163.0 37.2 157.3 40.6% 32.3 24.7% 2011 2012 2013 Q1 2013 Q1 2014 32
Slide 33: Gross Profit and Gross Margin
Gross Profit and Gross Margin US$ in millions US$ in millions 72.8 11.7 40.6% 40.6% 31.4% 67.0 34.3% 40.2 24.7% 24.7% 4.6 14.2% 2011 2012 2013 Q1 2013 Q1 2014 33
Slide 34: Operating Expenses
Operating Expenses US$ in millions US$ in millions 67.0 15.3 62.5 53.4 42.6% 34.9% 41.1% 32.8% 7.9 24.5% 2011 2012 2013 Q1 2013 Q1 2014 Operating Expenses % of Net Revenue Operating Expenses % of Net Revenue 34
Slide 35: Net Income (Loss) - Excluding iTV loss pick up and investment impairment
Net Income(Loss) - Excluding iTV loss pick up and investment impairment US$ in millions US$ in millions 7.2 -3.7 -3.0 -2.1 -3.7 -14.6 -14.6 2011 2012 2013 Q1 2013 Q1 2014 The loss pick up from iTV were $4.7M , $3.1M and $9.6M in 2011, 2012 The loss pick up from iTV were $2.0M and $1.2M in Q1 201
Slide 36: Strong Future Growth Strategy
8 Strong Future Growth Strategy
Slide 37: Key Goals in 2014
Key Goals in 2014 Continue to improve financial performance Commercialize Next Generation Packet Optical Transport Products Expand SDN and Wi-Fi Data Offload Technologies to Transform the Internet Architecture Diversify Existing Customer Portfolio Expand to New Markets Globally 37
Slide 38: Strong Future Growth Strategy
Strong Future Growth Strategy Maximize broadband growth globally Monetize investment in Continue to improve new media operating efficiency Enhancing Competitiveness and Increasing Shareholder Value 38
Slide 39: Investor Relations Contacts
Investor Relations Contacts UTStarcom, Investor Relations Jane Zuo Email: jane.zuo@utstar.com FTI Consulting, Inc. May Shen (Beijing) Tel: +86-10-8591-1951 Email: May.Shen@fticonsulting.com Daniel DelRe (Hong Kong) Tel: +852-3768-4547 Email: Daniel.DelRe@fticonsulting.com Simona Kormanikova (New Yor
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